Building a granny flat at the back of your property is a popular way to maximise cash flow from your residential property in Australia (particularly in Sydney, Newcastle and Wollongong regions where rental demand is high). Not all the properties can accommodate granny flat and this needs to be done with approval from local council.
There has been a lot of innovation in building design and technology for granny flats and depending on the type and room size, a typical granny flat would cost you around $80k-$120k these days. You can build granny flat from your savings or even borrow from existing property if you have enough equity in there. Lenders assess your application as a brand new application and depending on how we structure, the application can be lodged as a top-up or brand new construction loan. In order to minimise the delay and frustration during granny flat building, it is important that you have your finance kept in order. An experienced mortgage broker can help you in this, and we have helped many already. If you want to engage us as your mortgage broker, we are more than happy to come on board. Let’s explore your options.
Build wealth through property investments
If you are one of those few people who would like to create a massive wealth portfolio through property investments, then this content is for you. Please note that property investments are not risk-free. There are several risks involved in property investment process, which include market risk, property-specific risk, legislative risk, and investor-specific risks. Despite all these risks, property investments are considered relatively less risky compared to other asset classes. Since you are investing in brick and mortar, this asset class is easier to understand for most of the people.
In addition to physical understanding of the asset class, finance structure and strategy can also influence your investment outcome significantly. Building a property portfolio requires a careful planning to achieve a good combination of capital gain, cash flow generation and liquidity of assets when selling. Having a good finance broker on your side is a big plus point as they can not only organize your finance from multiple lenders in a very structured way, but their experience can also boost your confidence. In fact, many experienced investors rely on professional advisers while they continue to build a property portfolio.
Let's discuss if you would like our experience to count in your investment journey.
Invest little bit of saving
We live in one the most expensive countries and it is hard to manage some saving. To those of you, who have been smart and disciplined enough to save some money, it’s time to look out for meaningful investment. Property investment is one of the many options you have.
Investing in property requires a clear understanding of what you want from this investment. This helps you set the investment timeframe and put forward appropriate strategies. You might spend hours and hours doing research. However, as we know, investing is not only science but also art. This art comes from experience, which can be very helpful during property research, inspection and negotiation process.
When you have a finance broker who knows this investment game on your side and draws this experience by risking his own money, you would feel confident in the dealing. If you are looking for an experienced finance broker for your property investment strategies, we are ready. Let’s discuss further.
Need bigger space for growing family
Your requirements may change as your family grows. You might need a little bit of backyard or bigger room sizes or even additional number of bedrooms. It’s not only the family circumstances demanding what you need, but also if your financial circumstances and income position changes, you might be tempted to some new opportunities. For example, if you have a stable job and your current place is not convenient any more, then it may be a time to upgrade to a bigger space.
If you already have a property, then moving up to the second property can be a little easier. However, with the increased loan amount, lenders would also scrutinise your application rigorously. There might be situations where you want to keep both properties, sell one and keep the other or buy first and sell the existing later. Whatever you decide to do, getting a good finance broker on your side is very important. We are more than happy to be on your side. Let’s begin the conversation.
Build a new house
Building a new house is an exciting moment. Brand new design, latest architectural trend, modern inclusions and the smell of fresh paints can be an overwhelming experience. However, building a house is not an easy task either. There is an old Nepali saying that you wouldn’t mature until you've built a house yourself. This tells you how complex it is to build a house.
In addition to your loan approval, there are several other things that could go wrong and unfortunately, not all these events are in your control. Council approval, builder financial situation, weather etc are some of the variables that could contribute to complexity. Your finance broker should understand building construction process thoroughly right from the time you put deposit for the land to until you receive the key. If buying a vacant land and building a new house is your goal, we can assist you further with our experience. Let’s have a chat.
Save on Taxes
While we enjoy the beautiful lifestyle and world-class living here, Australia is one the highly taxed countries in the world. Let’s be fair and let’s be prepared to pay our fair share of taxes. However, we need to be equally vigilant on how we can minimise our tax bills legitimately. One of many different ways people try to save on taxes is through property investments and by using a special provision on Australian tax system, called Negative Gearing.
For example, let’s say that you invest in property and earn $25k rent per year and it costs you $30k (interest expenses, outgoings, property management, depreciation etc) per year to hold this property, then you are considered to be making $5k loss every year. You can then deduct this loss from your other sources of personal income. If you are earning $90k pa from another job, you can now claim this negative gearing and instead of $90k, you would pay tax on $85k only. As a result, you would save tax on $5k for this year at the corresponding personal tax rate.
Negative gearing has its own merits and demerits, and this strategy may not work for all. It is highly recommended to have a discussion with your tax planner and find out whether such strategy can help in your case. From time to time, political parties debate strongly whether to continue this provision for negative gearing or not. So, there is a bit of legislative risks too. Anyway, if property investment and negative gearing is your choice, we can help you arrange the finance. We can also assist you with appropriate loan product to suit your needs. Let’s meet to discuss further.
Save on rent
Paying rent vs mortgage is a highly discussed topic when you decide to own a home. Each of these options has their own merits and demerits. Owning a home may not be everyone’s goal, but many people aspire to become a homeowner one day. In Australia (mainly in capital cities), where rents are very high and interest rate on home loan is at record low level, many people find it cheaper to pay the mortgages (where you pay down the debt) than paying rent to landlords.
Let’s take an example of a property that can cost $650,000 in Sydney. If borrowed at 90% at an interest rate of 4%, weekly interest-only repayment is $450. You need to pay $550 per week to rent the same property!
If you are considering to buy a property and have done your Rent Vs Mortgage calculation, let's work together. We will help you with finance and coordinate your home buying journey.